Correlation Between Willis Lease and Triton International
Can any of the company-specific risk be diversified away by investing in both Willis Lease and Triton International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Willis Lease and Triton International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willis Lease Finance and Triton International Limited, you can compare the effects of market volatilities on Willis Lease and Triton International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Willis Lease with a short position of Triton International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willis Lease and Triton International.
Diversification Opportunities for Willis Lease and Triton International
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Willis and Triton is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Willis Lease Finance and Triton International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triton International and Willis Lease is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Willis Lease Finance are associated (or correlated) with Triton International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triton International has no effect on the direction of Willis Lease i.e., Willis Lease and Triton International go up and down completely randomly.
Pair Corralation between Willis Lease and Triton International
Given the investment horizon of 90 days Willis Lease Finance is expected to generate 4.23 times more return on investment than Triton International. However, Willis Lease is 4.23 times more volatile than Triton International Limited. It trades about 0.14 of its potential returns per unit of risk. Triton International Limited is currently generating about -0.02 per unit of risk. If you would invest 18,374 in Willis Lease Finance on August 30, 2024 and sell it today you would earn a total of 2,840 from holding Willis Lease Finance or generate 15.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willis Lease Finance vs. Triton International Limited
Performance |
| Timeline |
| Willis Lease Finance |
| Triton International |
Willis Lease and Triton International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willis Lease and Triton International
The main advantage of trading using opposite Willis Lease and Triton International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willis Lease position performs unexpectedly, Triton International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Triton International will offset losses from the drop in Triton International's long position.| Willis Lease vs. Custom Truck One | Willis Lease vs. GATX Corporation | Willis Lease vs. HE Equipment Services | Willis Lease vs. Alta Equipment Group |
| Triton International vs. SNDL Inc | Triton International vs. Olympic Steel | Triton International vs. Constellation Brands Class | Triton International vs. Sanyo Special Steel |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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